Sales and Distribution Business Blueprint: Key Concepts and Processes, Esquemas de Sistemas Distribuídos

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SAP R/3 IMPLEMENTATION

BUSNIESS BLUEPRINT DOCUMENT SALES & DISTRIBUTION

Table of Contents

A. Organization

1. Cross-Application/Central Organizational Units

1.1. Client

CI template:

1. General Explanation

The client is the highest level in the R/3 System hierarchy. Specifications made or data entered at this level are valid for all company codes and for all other organizational structures, obviating the need to enter this information more than once. Maintaining this information centrally ensures standardized data. Each client is a self-contained unit with separate master records and a complete set of tables. A client key is used in all master records, which ensures that they are stored per client. Users must enter a client key when they log on to the system. In so doing, they are telling the system the client in which they wish to work. All the entries made are stored per client and data processing and analysis is also carried out per client. Access authorization is assigned per client/ User.

2. Naming Convention

The following naming convention has been set up for the clients on the development server : Client 100 - For taking up all configuration activities .All requests shall be generated here and transferrred to the production client only after being tested on the client 200 which shall act like a quality client to know systems behaviour after transportation of requests from the development client Client 200 - It would be the quality client and would have a status non modifiable i.e configurational activites will not be allowed on this client and will have to be necessarily be carried out on the client 100 first and then be transported to client 200 and ultimately to the production client on the productiion server. There shall only be one production client on the production server with status non modifiable and all configurations to be transported to this client would first have to necessarily flow through the quality client 200 on the development and checked thereat. 4

Client 300 - It will be used as sandbox for testing & training purposes. Once the Integration testing is over the Quality client will be copied onto client 500 which will be our Production server. A copy may be made as client 400 as a back up measure. The clinet 400 will be dependant on space availability on the server. Further to this the Roll out and branch connectivity has to be established which will be through VSAT linkage as well as VPN networking at Khopoli and branches respectively.

3. Description of Improvements

Transpercency in transactions Efficient control over dtabase. Common reporting Effective decision making abilities.

4. Special Considerations

A strict control would have to be built in so that the flow of all configurational activities and all development is sequential and is tested on the development server prior to its being taken up to the production server.

5. Triggers / Inputs

NOT APPLICABLE

1.2. Credit Control Area

Q: 1) On which level do you perform credit control? On company code level, cross- company code level or a lower level? (Integration) 5

4. Assignment of Organizational Units

Credit Control Area BCCA is assigned to the Company Code BSSL.

5. Description of Improvements

Since the credit is controlled centrally thus only one Credit control area is required at Company Code level.

6. Special Considerations

Credit of One Customer to be linked with Other Customers pertaining to same group.

7. Triggers / Inputs

Credit shall be controlled at Highest/Company level.

1.3. Division

Q: 1) Do you need to divide your products into product groups (divisions) to allow customer-specific agreements (such as price agreements or terms or payment)? A: Yes we r having following divisions :-

• GP
• CRCA
• HR
• Arising (Bye/CO-Products & Scrap)
• Miscellaneous (Stores/others items)
• Power (Electricity) Q: 2) Warning: For SAP Retail-specific functions, the division is not supported. A dummy division is always used. A: N/A

CI template:

7

1. General Explanation

It is a way of grouping materials, products and services. If a company has large and varied product range it makes sense to assign each of the products to a particular division. The system uses divisions to determine the sales areas and the business areas for a material, product and services. A product or service is always assigned to just one division. From the point of view of sales and distribution, the use of divisions lets you organize your sales structure around groups of similar products or product lines.

2. Naming Convention

Division can be assigned a code of two characters and a text description of Twenty characters

3. Definition of Organizational Units

Divisions are defined as below :- 00 - Cross Division CR - Cold Rolled GP - Galvanized HR - Hot Rolled AR - Arising (All Bye/Co-Products & Scrap) MS - Miscellaneous (All other Materials viz. Store's items) PW - Power/Electricity. Specific to KHOPOLI Plant :- TU - Tubes (ERW & CDW) HT - Hardened & Tampered Steel HS - High Tensile Steel Strapping CL - Color Coated Sheets

4. Assignment of Organizational Units

Sales Org. TRADE is assigned :- CR - Cold Rolled GP - Galvanized HR - Hot Rolled AR - Arising (All Bye/Co-Products & Scrap) 8

ORG chart EXP.doc \132.147.0.51\bsslsap\QAdb\Reports\SD\ORG chart EXP.doc SPC_OEM.doc \132.147.0.51\bsslsap\QAdb\Reports\SD\SPC_OEM.doc Q: 1) Do you need to keep the sales activities of particular enterprise areas/business areas or product groups completely separate? A: Yes: We keep our sales activity for OEM, Trade and Export seperatly. In case of branch offices same person handles activities for all three. Comments: In some cases same person handles all activity. Q: 2) Do you want the R/3 System to restrict certain product mixes in sales orders? If so, explain why. Explanation: Do you wish to ensure the system supports restrictions on product mixes in sales orders? If so, explain why. For example, some customer groups are only allowed to buy certain product mixes, say from the "budget range""". It may be necessary to prevent free goods and charged goods, or MRO supplies and standard product, appearing on the same sales order. A: YES: : We book diffierent products mix in different sales order for example orders are booked seperately for GP and CR Q: 3) If you have multiple companies, are sales in one company sourced from a plant in another company? In which company is the revenue recognized? A: N.A

CI template:

10

1. General Explanation

SD is organized according to sales organization, distribution channel and division. A combination of these three organizational units forms the sales area. A sales organization can be subdivided into several distribution chains, which determine the responsibility for a distribution channel. Several divisions can be assigned to a sales organization, which is responsible for the materials or services provided. A sales area determines which distribution channel can be used to sell the products from one division in a sales organization. SALES AREA defines a combination of not more than one division, distribution channel, and sales organization. Thus if there are two divisions using the same distribution channel, each division will be considered to belong to a different sales area. All customer data relevant for sales and distribution is defined according to sales area. An individual customer can be assigned to more than one sales area if there are different requirements and agreements to be considered. Prices, minimum order or delivery quantities are the sort of factors that may have to be recognized by creating unique sales area for them, always in the SAP R/3 structural context of a sales organization and perhaps a sales division and distribution channel as well. You can perform data analysis at sales area level.

2. Naming Convention

Sales area 1000/10/01 (means: sales organization 1000, distribution channel 10, division 01)

3. Definition of Organizational Units

At Bhushan Number of :- Sales Org. = 3 Dist. Channel = 4 Division = 10 Thus total possible combinations are 120. But All are not practically feasible. Only 34 Sales Area are Identified.

4. Assignment of Organizational Units

11

9 EXP ME HR

5. Description of Improvements

Since all elements are defined thus in future if there is new operable Sales area then assignments can be done.

6. Special Considerations

Recommended to have only those Sales Area which are practically required. New one to be created at time of requirement.

7. Triggers / Inputs

Customer to be maintained at Sales area level.

2.2. Sales organization

Q: 1) Who is responsible for sales-related components in the material and customer master data? A: Marketing Co-ordination Cell i.e OEM/TRADE/EXPORT shall be responsible seprately Q: 2) Is a customer assigned to one sales unit or can he be addressed by several sales units? A: YES customer can be addressed by several units ,Eg 1 ) One customer can buy from OEM as well as trade. 2) One cusomter can buy from mulitple branch offices as well as plants/depots. Q: 3) Does the law require complete separation of sales activities? For example, you are not allowed to mix human and veterinary medical products in one sales order. 13

Explanation: Does the law require complete separation of sales activities? For example, you are not allowed to mix human and veterinary medical products in one sales order. It is a legal requirement that sales activities for the two product areas are kept strictly separate. A: No law does not require us to keep our sales activity speprately, but for our convinience, we do seprate activiity for GP and CR .(Sperate order are booked for GP and CR) Q: 4) How is your sales and distribution processing structured? For example, is order processing/billing centralized or decentralized? A: In OEM we have only direct sale for our GP/CR, Billing is Centralized.Plant. (NO DEPOT SALE) In Trade we are selling 1) GP/CR directly, through depot. 2) Waste , direclty and through agent.can also Billing is decentralized (Billing is done at depot) In Export we are selling the material GP/CR direclty and through agent.Billing is centralized at plant. Q: 5) EH&S : Do you carry out dangerous goods checks on the basis of deliveries? A: NOT APPLICABLE Q: 6) EH&S : What control function does the sales organization have in shipping material safety data sheets? A: NOT APPLICABLE

CI template:

1. General Explanation

All business transactions in Sales and Distribution have to be processed financially within a sales organization. A sales organization can obtain its material from more than one plant. The business transactions in sales and distribution module are always processed within one particular sales organization. You can use sales organization to define the regional sub division of the market (For e.g. northern sales region, southern sales region). 14

A: We can sell thorugh all channels in case of EXP/OEM/TRADE Q: 2) Do these sales processes require different master data? A: At present we are maintaining separate master for different sales process. CI template:

1. General Explanation

The distribution channel represents the channel through which salable materials or services reach customers. Typical distribution channels include wholesale, retail and direct sales. Within a sales organization a customer can be supplied through several distribution channels. One can maintain information about customers and materials by sales organization and distribution channel A single distribution channel can be assigned to one or more sales organizations

2. Naming Convention

Distribution Channel can be assigned a code of two characters and a text description of 20 characters

3. Definition of Organizational Units

DS - Direct Sales to Customers AG - Sales through Commission Agent ST - Stock Transfer to Depots/Plants ME - Merchant/Deemed Exports

4. Assignment of Organizational Units

Sales Org. TRADE is assigned :- DS - Direct Sales to Customers AG - Sales through Commission Agent ST - Stock Transfer to Depots/Plants Sales Org. OEM is assigned :- DS - Direct Sales to Customers 16

AG - Sales through Commission Agent ST - Stock Transfer to Depots/Plants Sales Org. EXPORTS is assigned :- DS - Direct Sales to Customers AG - Sales through Commission Agent ME - Merchant/Deemed Exports

5. Description of Improvements

All type of sales can be covered by the afore said Organizational Units.

6. Special Considerations

None

7. Triggers / Inputs

Separate distribution channels required for selling of the products Directly to customers, through Commission Agents, Deemed exports (i.e. selling to Local Customer who in turn will export it), Transferring Stocks to other Plants/Depots.

2.4. Sales office

Project documentation: BranchChart.doc \132.147.0.51\bsslsap\QAdb\Reports\SD\BranchChart.doc Q: 1) How is sales structured (social organization of employees)? A: We have branch offices and Branch cum depot .Please see the flow chart for Sales Structure. 17

VARA S.Off. Varanasi

4. Assignment of Organizational Units

All Sales Offices are to be assigned to all sales area of Trade & OEM. But in case of Exports only SHBD, KHPL and MUMB are to be assigned.

5. Description of Improvements

Sales Office will be a mandatory field in all sales order, so that MIS can be generated on the basis of it.

6. Special Considerations

Sales Office can NOT be maintained in Customer Master Data since Same Customer in same Sales Area can Buy from different Sales Office.

7. Triggers / Inputs

All orders to be booked under one sales office.

2.5. Sales Group

Q: 1) How many sales groups do you handle? A: At present in OEM we are having 12 in branch office and 4 at SHB plant level In Trade we have 10 sales group at SHB plantand 12 at respective branches. In case of Export 2 at Shb plant and 1 at Mumbai Branch and Khopoli plant .See the sales organisation chart. Q: 2) Do you have special reporting for commission management and sales budget? A: N.A 19

Q: 3) Do you evaluate at sales representative level? If yes, please consider also the partner definition. A: Presently we are evaluating the sales at plant level but we would like to evaluate the sale at Branch offices level as well as Employee Level.

CI template:

1. General Explanation

Sales Group is a group of sales people who are responsible for processing sales of certain products or services.. By using sales groups one can designate different areas of responsibility within a sales office. While generating a sale statistics one can use sales group as one of the selection criteria.

2. Naming Convention

Sales Group can be assigned a code of three characters and a text description of 20 characters

3. Definition of Organizational Units

Bhushan can have multiple Sales Group which will be segregated by the Range of Numbers i.e. "100 to 499" for Group attached to Sahibabad Plant and "500 to 999" for Group attached to Khopoli Plant. Coding for groups will remain same but their description will change as per requirements.

4. Assignment of Organizational Units

Sales group are assigned to Sales Offices. No. of assignments/provisions would be done as follows :- Sahibabad Plant :- Sales From Upto Possible No.s 20